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Head of SME and Partnership at ABSA, Audrey Abakah spoke about \u2018Practical Finance Tips for SMEs\u2019 on the Citi Business Festival on-air series on Tuesday, June 7, 2022.<\/p>\n
In her presentation, Audrey\u00a0highlighted some practical finance tips for Small and Medium Enterprises.<\/p>\n
She posited that money is the blood of every business, \u201cand if you mess up with your finances you are heading for failure.\u201d<\/p>\n
\u201cThat is why it is very critical for every SME to be interested in their finance. Every penny counts,\u201d she added.<\/p>\n
Paying attention to expenses and cash flow is \u201cvery critical because sometimes how money is spent is very concerning. Most SMEs are full of ideas and without discipline may throw money around on any business idea that comes up without the needed expertise.\u201d<\/p>\n
She explained that before any investor is interested in an SME, it will consider the business\u2019 financial activities.<\/p>\n
\u201cProper records of your ins and outs will help the investor better understand how the business has been managed over time. It also helps them appreciate the level of decision of the leadership of the business,\u201d she added.<\/p>\n
\u201cWhen you want to sustain your business after it has gone through hard times, you should take your business seriously by way of insuring it. Not only should you insure your business but your life also.\u201d<\/p>\n
She explained that when this is done, the insurance company can come to the aid of the entrepreneur in case of any eventuality.<\/p>\n
She explained this is largely based on a customer-supplier relationship.<\/p>\n
\u201cThis involves having a supplier who provides goods, they usually give you a time frame, mostly 30 days. It is a very good financing option. Only that it only works when there is trust between the customer and the supplier.\u201d<\/p>\n
She said most SMEs fail to plan ahead for their retirement<\/p>\n
\u201cThose in the formal sector, are fortunate enough to have other retirement plans done for them. But for the informal sector, you need to be deliberate about it, otherwise, they will find themselves wanting.\u201d<\/p>\n
She urged SMEs to have investments on the side and also have a good succession plan.<\/p>\n
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